What is the Financial Planning Process?

Jack Dugan explains the importance of having a financial plan in place and discusses the multiple steps of the process involved.

Transcription:

Hi, I'm Jack Dugan, Certified Financial Planner™ and Senior Investment Advisor for Pure Financial Advisors, and welcome to the Question of the Week.

The question this week is: what exactly is the financial planning process? Well, one thing you might want to consider is think of it like you're going on a vacation. What do you do when you go on vacation? First of all, you research where you want to go. Then you're going to figure out what the travel wages are going to be, how you're going to get there..once you get there, you're probably going to need reservations for somewhere to stay. Then I'm going to think about, well what I am I going to do while I'm there? Maybe I want to get museum passes, maybe I want to go on a private tour, whatever. So you kind of plan it out.

The same thing is true when we're talking about financial planning. Figure out where you want to go, what's the goal objective? What do you want to accomplish? Maybe you want to put your kids through school, maybe you want to plan for retirement. Whatever it may be, once you decide what that goal is, then you start planning towards it. What do I need to save to be able to make that goal become reality? Where am I going to save? What are the consequences of the taxes when I do save? How am I going to distribute the money once I get there? What kind of pitfalls might I run into in the way. What happens if I become disabled? What happens if I need major healthcare costs? Do I have something in place to make sure that I can cover all these costs?

Just like planning for a vacation, make sure your financial life is planned too, to not only ensure that you're going to have a successful financial life, but you're also going to provide peace of mind.

I'm Jack Dugan, and I hope you enjoyed the Question of the Week.

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